However, decentralization is a continuum, & certain systems are more decentralized than others.

While some people believe that blockchains are by default decentralized..

Here's what to know:

What I'll cover in this thread:
What is Decentralization?
Why is decentralization important?
Growth in DeFi
Measuring decentralization on a blockchain
Governance and development distribution

What is Decentralization ?
A good or service is considered decentralized if it is managed by a group of users who follow the majority rule.

In the case of bitcoin, the majority of its network participants decide on its facets, such as the total supply of bitcoins.

Why is decentralization important ?
Conflicts of interest frequently occur in centralized systems.

But, Decentralized systems considerably reduce the risk of a successful attack & the potential for corruption since they lack a single point of failure.

→ Additionally, Decentralized systems cannot implement changes without the consent of the majority of participating parties.

In most cases, crypto enthusiasts often prize decentralization and shame coins that show signs of centralization.

Growth in DeFi

The blockchain ecosystem has seen significant growth in the last year in the domain of decentralized finance.

While these financial instruments are being constructed using protocols, dapps, "DeFi" assumes that these core parts are decentralized as well.

Measuring decentralization on a blockchain

The decentralization of a crypto network can be hard to measure. Fortunately, blockchains share enough traits to evaluate the decentralization of a network.

However, investors should know that decentralization is a scope & that the majority of widely used blockchains are neither centralized nor decentralized.

Measuring the decentralization of the two types of blockchains:

→ proof-of-work

→ proof-of-stake

which involves different factors.

Proof of Work

Blockchains that use proof-of-work, like Bitcoin, are made up of users & nodes, both mining & non-mining.

These networks' decentralization & security mostly measure on how high their hash rates are & how evenly distributed they are among various entities.

Proof of Stake

Decentralized PoS Blockchain can be measured based on:

→ the no of stake pools/validators

→ the distribution of the token supply among those validators

→ the % of the token supply that is staked

PoS blockchains determine who can add blocks to the chain.

Governance & development distribution

Investors looking for more decentralized initiatives should think about the power of a blockchain & whether community members/a centralized entity oversee the growth

→Development for leading PoW blockchains is mostly community-driven.

→ The founding teams have a significant influence on the governance & development of proof-of-stake blockchains.

While some more recent blockchains may eventually decentralize this process

some still rely on centralized development teams to make upgrades.

Bonus

Advantages of Decentralization in Blockchain

Benefits that can answer “is blockchain really decentralized” would include the following:

→ The Trustless Environment Facility

→ More security

→ Better data reconciliation

Conclusion

Decentralization is significant across the board, not just blockchain.

With the use of blockchain, decentralization may be made more obvious to people, who will understand its need.

It can provide the basis for web3 by returning power & control to the people.

That's a wrap guys, I hope you've found this thread helpful. See you in my next content!